Russia’s fiscal slide: Causes, cure and investment implications

Overview

Now is the right time of year for investors to take stock of Russia’s fiscal position and prospects, and there are stronger reasons for paying close attention to this subject today than at any time in the past decade. The federal budget has fallen into a structural deficit caused mainly by pensions. An oil price cure would work only at an unlikely and problematic long-term level of US$110/bbl. Projections coming out of this year’s budget round assume no falls in the oil price from...